“I COULD have had my home paid off within the next 5 years and be retired, but instead I am losing it now to foreclosure!”
This is really a sad story I don’t wish anyone to go through.
Caller: I owe only about $140,000 on my home back in year 2004 and when all the market was selling properties like hotcakes; my neighbors talked me into an equity loan to buy another property in the area from his wife. The outlook was so sunny that I thought I could buy and later on, sell one house to live in one free and clear.
I took out a loan for about $100,000 on a line of credit to start shopping for another investment home with my neighbor’s wife, finally got one and put all the monies down on my next house.
A few months later, the new house needed some more repairs and I thought of also repairing my own home to upgrade so to speak. My neighbor helped me again and got me two loans with World Savings loan and now I owe about 450K all together. My income is pretty good and I was tagging along fine.
Until 2008, when the market value starting spiraling down, I had to spend more money on both homes on repairs. Here, I realized that my mortgage payments to World Savings were really low but my loan balance was increasing every month due to the type of Loan that was given to me “Negative Amortization.”
I was furious that I did not know this and I was angry towards my neighbor who did not properly educate me on this. I am the one handling all our finances before because my husband was ill and passed away last year.
I met with a Loan Modification Company in 2009 and paid roughly around $4,000 to them for the process. After about 8 months, after advice to stop payments, my property went into foreclosure proceeding. The value then was down to around $300,000. I was then referred to a law firm, who arranged a retainer of around $1,500 for the next 7 months, plus an upfront fee of around $4,000. I found out later on that this company was under investigation for FRAUD. I am calling you because I got a lawyer calling me now to file for a class-action lawsuit against World Savings, which is now owned by Wells Fargo. Should I join the class-action suit and pay another lawyer to help me with this?
Ken Go: Caller, you have to know when to stop. You are a loan scammer’s delight! The scams that are coming out now are very believable but are not TRUE. I don’t want to talk about what happened to you in the past. What you need to see now is your debt of close to $500K, including back pays and penalties.
What are you going to do with your $500K balance, now that your property value has dropped to below $300K? You have already lost your other property to foreclosure. You rolled the dice and lost your investment, you just paid two fraudulent loan modification companies close to $25,000 and you want to pay them more money. Call your lender and no one else. If you want to keep this house, your lender is the only one who can help you. We all make mistakes, now learn from it.
Caller: I own a rental property where there are tenants paying but it’s not enough to cover the mortgage payments and property taxes. What should I do? I failed a loan modification, but my tenants are paying well and I really want to keep the house.
Ken Go: Your property value is around $300,000 and your loan balance is still around $500,000. Why should you slave for your tenants? The negative losses are too much to even benefit from, tax-wise. I wouldn’t suggest you to keep it because of the negative equity. You need to get rid of this debt and with your own income and current owner-occupied property, you will be fine. Right now, the weight of the negative rental income is creating a lot of stress and income loss. Why bother? If you can get away from it now, you should. This client is currently short selling.
Caller: Hi Ken. You helped us do a short sale back in October 2010. I just got a credit report, my loan balances for my first and second mtg. are still showing, and I am also showing past due amounts for both. Please help me take care of this.
Ken Go: I helped these clients short sale last year and went back to review the approval letter. It clearly states that once the short sale is approved the credit will report “Settled Paid for less than amount owed” and balances forgiven. I immediately called the lenders and raised hell and told them that our short sale agreement was for these terms agreed on the Short Sale approval letter. They are now working on getting a supervisor involved in hopefully clearing the issue. Great job, always check your credit after. I can also help you do that and have helped a lot of my clients run their credit after the Short Sale.
Caller: You have been helping me with my Loan Modification process with BOA, I just got declined again and I don’t know what to do. I am a widower with three daughters which two of them are still in school. Please advise.
Ken Go: I have been talking to this client for the past 6-8 months and have been getting my BOA connections to help her. Her mortgage terms are 3.75% for 40 years and her payments are currently around $1,300 piti due to change by year end. She worries that after the change, she might not be able to afford the payments, unless her graduating child finds a full-time job. It was a long shot when she tried to modify, 3.75% for 40 years, these payments are already pretty low.
After more talks, I finally realized where her problems lies. I strongly believe that her problem lies with her children. I believe she is carrying the entire stress on her own and her children have no clue. She has two adult children and they have to take responsibility, especially after her husband passed away and all the burden came upon her. I suggested that she should sit down with her children and explain what is going on. We live in a westernized country – the least we can do is learn from the western world and find ways to make our children become independent or responsible after a certain age. I know because I am a slave to three of my children, but I vow to only do it until they graduate. Then my time will be for my wife and for myself.
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Please send your inquiries, request for help to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Call Ken Go of Innovative Finance Group for future Real Estate needs, Financing, Refinancing, Loan Modification questions or Short Sales. Call Ken at (562) 508-7048.
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